Announcement of the Commencement of Discussions on a Business Integration through the Merger of BDO
Announcement of the Commencement of Discussions on a Business Integration through the Merger of BDO
BDO Sanyu & Co. (Managing Partner: Tomohiro Koto) and Gyosei & Co. (Managing Partner: Takayuki Nakagawa) are pleased to announce that they have executed a basic merger agreement to begin discussions toward the establishment of a new integrated audit firm, BDO Japan & Co., with the objective of further enhancing their ability to meet the trust and expectations of society and the capital markets.
The merger will be conducted on the basis of equality between the two firms. While the merger will be pursued on the basis of equality between the two firms, the contemplated legal structure is a merger in which Gyosei & Co. will be the surviving entity and BDO Sanyu & Co. will be dissolved.
1. Background of the Merger Discussions
The environment surrounding audit firms has undergone significant transformation in recent years, driven by heightened expectations for audit quality, increasingly stringent regulatory requirements, intensified competition for talent, rapid advancements in artificial intelligence (AI) and information and communication technology (ICT), and the growing complexity and globalization of clients’ business operations.
To respond effectively to these developments and continue earning the trust of of society and the capital markets, both firms recognize the importance of strengthening their management structure, enhancing professional expertise, attracting and developing diverse talent, and investing in advanced audit infrastructure.
By combining the audit quality, professional capabilities, talent, networks, and operational strengths that each firm has developed over many years, the firms believe they will be better positioned to address these challenges in a more timely and sustainable manner.
2. Fundamental Concept of the Merger
The purpose of this merger is not merely to increase scale. Rather, it is founded on a shared principle to jointly create a new audit firm as equal partners.
The two firms share common values and philosophies, including an unwavering commitment to the continuous pursuit of audit quality, a belief that people are their most valuable asset, and a long-term perspective on organizational growth and development.
In addition, the two firms have highly complementary strengths across a range of areas including talent composition, audit methodologies and expertise, AI and ICT development capabilities, international service delivery, and non-audit service offerings. The integration is therefore expected to enhance the value provided to clients, the capital markets, and society as a whole.
3. Vision for the Combined Firm
The combined firm aims to be an organization that continues to earn the trust of society, the capital markets, and clients, while fostering an environment in which diverse professionals can thrive and future generation of leaders can grow.
The combined firm seeks to become:
• An audit firm capable of delivering consistently high levels of audit quality on a sustainable basis;
• A firm that practices advanced auditing through proactive investment in AI and ICT;
• A firm with a strong international network platform and robust cross-border service capabilities;
• A firm that provides high-quality non-audit services, including sustainability advisory, financial advisory, and IT consulting services including ISMAP-related services.
Through these initiatives, the combined firm aspires to become one of Japan’s leading and most influential audit firms.
4. Scale of the Combined Firm
Assuming the merger had taken place based on figures as of July 1, 2026, the combined firm would have the following profile:
• Approximately JPY 11.0 billion in annual revenue (estimated for the fiscal year ending June 2026);
• 822 personnel, including part-time professionals;
• 192 listed company audit clients; and
• Approximately 500 audit clients in total.
The affiliated international network is BDO International Limited, the world’s fifth-largest accounting network. Upon completion of the merger, the combined BDO network in Japan, encompassing its audit, tax, social insurance and labor consulting, consulting and advisory entities, is expected to comprise approximately 1,000 personnel (as of July 1, 2026).